To try to show how to chart a dichotomous key to your students, you may want to start with having them draw out their family trees. They can fill in their siblings, parents, grandparents and other relatives that they know. You can ask them questions about one family member's relation to another. This should give a good visualization of the charting process and how things relate.
Have the kids pick out definable features of themselves and each other. These things can be types of clothing that are being worn, being shorter or taller than a certain height, color of hair, length of hair or handedness. They can create a dichotomous key that begins to break down the features of the classroom. The first item in the key should be kids; then it can begin to break down by gender and then other features until you are down to one student per category.
Use a series of shapes to create a dichotomous key. Come up with at least four pictures of shapes that differ by color or pattern. Have your students break them down accordingly, until each different shape is in its own category.
Using animals or other living creatures is a great way to introduce categorization to students. This example is great for teaching older students, since you can get as complex or as simple as you'd like. Have your students create a list, then have them tell you what makes each one different. For example, the starting point of this category would be "animal," then one sub-section could be "brown animal," then "animal with antlers." You would break it down according to the list and features of the animals your students created.